The Dominican Republic has officially established a regulatory framework for investment crowdfunding, a significant step toward modernizing its capital markets. Through resolution R-CNMV-2025-27-MV, the Superintendence of the Securities Market (SIMV) has approved the new Investment Crowdfunding Regulation. This initiative formally integrates this innovative financing model, allowing domestic companies to connect with investors and raise capital through the public issuance of securities under clear and supervised guidelines.
Addressing a Regulatory Void
Until the enactment of this resolution, the Dominican legal system lacked a specific instrument to govern investment-based crowdfunding activities. The new regulation fills this critical void, establishing a necessary legal tool to oversee these operations effectively. It provides a structured framework that enhances legal certainty, strengthens market integrity, and boosts protection for all participating investors.
Expanding Market Access for SMEs
A primary objective of this new framework is to democratize access to capital, particularly for non-traditional issuers. The regulation is designed to facilitate the entry of small and medium-sized enterprises (SMEs) into the securities market. This move is poised to stimulate economic activity by offering a supervised and accessible channel for SMEs to secure vital growth financing.
A Framework for Platform Operation and Oversight
The regulation stipulates that crowdfunding platforms must be managed by administrators of centralized trading mechanisms, operating under a stock exchange model. These entities require authorization from the National Securities Market Council and subsequent inscription in the securities market registry. This structure ensures that all platforms adhere to established market standards, promoting transparency and operational consistency across the board.
To guarantee robust oversight, the authorization process for platform administrators is divided into two distinct phases. The initial stage involves a thorough legal evaluation to ensure compliance with all statutory requirements. This is followed by a comprehensive operational assessment that scrutinizes the entity’s technological infrastructure, corporate governance policies, and risk management protocols.
The new rules apply broadly to all key participants within the crowdfunding ecosystem, not just the platforms themselves. This includes the companies issuing securities, financial intermediaries, and central securities depositories involved in the transactions. While the Dominican Republic's Stock and Securities Market (BVRD) is currently the only registered entity of this type, the regulation paves the way for new participants.
Scope and Exclusions of the New Mandate
The regulation’s scope is precisely defined, targeting investment-based crowdfunding that is conducted through the public offering of securities. Its purpose is to integrate this modern financing method into the formal, supervised market structure. This specific focus ensures that investor protections are fully aligned with the country's existing securities laws and best practices.
It is important to note that the framework explicitly excludes certain other forms of collaborative financing from its purview. Loan-based crowdfunding and donation-based models, where there is no issuance of securities or expectation of a financial return, fall outside this specific regulation. These activities will continue to be governed by other applicable legal provisions.
The approval of this regulation marks a significant milestone in the evolution of the Dominican Republic's financial sector. By establishing clear and robust rules for investment crowdfunding, the country is fostering innovation, diversifying financing options, and enhancing market transparency. This forward-thinking development promises to create a more inclusive and dynamic capital market for both businesses and investors in the years to come.